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Electrolux vows to appeal 72% US tariff on its washing machines

Swedish home appliances manufacturer AB Electrolux said March 14 that it will appeal the tariff rate of 72.41% that the U.S. Department of Commerce set on washing machines it made in Mexico and imported into the U.S., which could set the manufacturer back with a one-time expense of up to $70 million.

The Commerce Department set the tariff in November 2017 on Electrolux large residential washing machines manufactured in Mexico and imported to the U.S. between February 2016 and January 2017. Electrolux said it will challenge the department's decision "vigorously."

The company said the tariff, which is significantly more than the 3.67% tariff set for the company in 2017, could lead to a one-time expense of up to $70 million. However, the company believes that it has a "very strong" legal standing in the case and that "at this point, will not make any provision related to this potential cost."

Electrolux rejects the department's claim that the company failed to submit data in time. The company believes that the department's decision has no "legal merit" because it failed to give the company actual notice of the relevant documents or any deadline for response.

The decision comes nearly two months after President Donald Trump approved the U.S. International Trade Commission's recommendation to impose a tariff of up to 50% on large residential washer imports to the U.S., a case that came to national attention after Michigan-based Whirlpool Corp. filed a Section 201, or "safeguard" petition, with the ITC in May 2017, claiming that South Korean rivals Samsung Electronics Co. Ltd. and LG Electronics Inc. were flooding the U.S. market with what it claimed were washers below fair market value.

The challenge makes good on threats Electrolux previously made regarding the preliminary tariff rate of 72.41% set by the Commerce Department in November 2017, when the Swedish producer said it would challenge any final decision to alter the 3.67% tariff rate that the company had been assigned in March of that year. The final determination of the current investigation was March 12.

The department said in a March 12 memo regarding the antidumping review that it upholds the "adverse" determinations on the company's imports as well as untimely responses from Electrolux during the investigation. Electrolux, whose brands include Frigidaire and Westinghouse, first received an antidumping order and tariff rate on its imported washing machines in 2012, when the Obama administration found that the Swedish producer was selling its machines at less than fair market value in the U.S.

The Commerce Department reviews the rate each year and set the tariff rate at 3.67% in March 2017, but the Trump administration significantly increased that rate to 72.41% for the fourth review period that ran February 2016-January 2017.

The 72.41% tariff applies to large residential washing machines and certain subassemblies, including assembled cabinets for the washers, imported by Electrolux from Mexico into the U.S. during February 2016-January 2017.

According to the Commerce Department, stacked washer-dryers and commercial washers are excluded from the tariffs.

Tim Truman, a department spokesman, said the agency had no further comment beyond what is included in its March 12 Federal Register notice.

"Based on our analysis of the comments received, our final results remain unchanged from the preliminary results," the department said in the notice.